Academic dissertation to be presented with the assent of the Doctoral Training Committee of Technology and Natural Sciences of the University of Oulu for public defence in auditorium IT116, Linnanmaa, on 12 June 2015, at 12 noon

Abstract

Although the need for change was recognized a couple of decades ago, the construction industry is still struggling with its productivity development and customer satisfaction. Usually, construction improvement initiatives focus on developing practices related to project management and delivery processes. However, this study views the general underperformance of the industry from the perspective of how the construction business is managed and conceptualized in practice.

The objective of this thesis is to understand the role of business models in construction business management. This objective is pursued by addressing specific research questions in four individual publications, two of which contribute to the research objective from a more conceptual and two from a more empirical viewpoint. The exploratory study follows the qualitative research tradition and exploits the case study approach. The primary method for data collection has been interviews.

This study demonstrates the applicability of the business model concept to the analysis and development of the construction business. However, its use requires a comprehensive understanding of the concept and proper alignment of its elements in practice. The results of this study indicate that the current business models of construction companies are too similar to enable value-based competition. Indeed, the conventional business models neglect the customer perspective and thus revolve around internal efficiency rather than customer value creation. Consequently, construction businesses are usually managed on a project-by-project basis without the governing effect of specific customer-oriented business models and a clear long-term vision or business purpose that would go beyond the objectives of growing and surviving.

A better understanding of business models provides a starting point for managers to reform the construction business and the whole industry. Explicitly defined business models provide a foundation for consistent management practice and process development. New possibilities for customer value creation can be exploited as the limitations of the current thinking are overcome and business models are approached from the viewpoints of the customer and value creation.